Maria Mora, Technical Manager at CDP maria.mora@cdp.net Wit With - - PowerPoint PPT Presentation

Maria Mora, Technical Manager at CDP maria.mora@cdp.net

XBRL WEEK IN FRANKFURT 2016

 Wit

With the he 2015 2015 Pa Paris ris agreem greement ent, climat limate cha change ge is at the forefront of issues where human activities have exceeded the ability of Earth’s natural systems to compensate.

 Business

sinesses es are both significant contrib ribut utors

• rs to, and potential solut

utio ion providers for, environmental problems.

 To

To put ut solut solution,

• n, they need to collect relevant, timely, reliable, material and

complete information upon which to base their business strategy.

 Providers of capital, insurers and regulators also need

eed this his info informa rmation

• n

fr from bus usiness inesses in a transparent, comparable, clear and verifiable structure so that they can make the best informed investment decisions and ensure compliance.

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XBRL WEEK IN FRANKFURT 2016

 Polici

cies es, global l agreem eement ents and report rting ing initia iativ ives es (like CDP) appear as a potential solution to reduce the environmental degradation, including climate change.

 Most G20 jurisd

isdictions ictions place a legal obligation on companies to disclose material risks in financial reports, which includes risks from climate change.

 However,

er, regul gulators rs, inves estors rs, credit itors

• rs and underw

erwrit riters ers have e difficulties ficulties to access to that information to inform their decisions.

 As a result, the relationships between financial and environmental impacts

are not understood, generating an equation where finan ancial ial imbal alan ances and environmental degradation are part of the result, driving to an unstable global system.

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XBRL WEEK IN FRANKFURT 2016

 Lack of finan

ancial cial significanc nificance and exposure to environmental aspects.

 Lack of alignm

nment ent between financial and environmental disclosure regimes.

 Data quality

lity gaps: incompleteness, reliability, comparability, verifiability and data structure.

 Lack of inform

rmat atio ion n systems that facilitates the disclosure and use.

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 In

2015, the Finan Financial cial Stabil Stabilit ity Bo Board rd (FSB (FSB) stablished the industry-led Ta Task sk Force Force

• n
• n

Climate imate-re rela lated ed dis discl clos

• sure

ure (TCFD FD) to make recommendations for improving principles and practices for voluntary disclosure and selected a diverse group of experienced members (users, preparers, and market participants from a variety

• f industries and regions).

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XBRL WEEK IN FRANKFURT 2016

 The main goal of the TCFD is to develop along

2016, a coherent framework to :

• support the disclosure of climate-related financial risks

and opportunities

• promote the alignment across existing disclosure

regimes

• improve the production of consistent, comparable,

reliable, clear and efficient information

• increase the consideration of environmental matters on

decisions in the short, medium and long-term

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Preparers eparers: : listed companies and issuers of public securities, Financial and nonfinancial companies. Users rs: : investors, lenders, and underwriters. Report rting ng chann nnel: el: mainstream financial filings and investor annual reports. G20 landscape

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 Phase

e 1: 1: Develop scopes and objectives for the proposed work and create a set of fundamental disclosure principles. (March, 2016).

 Phase

e 2: 2: Delivering specific recommendations and guidelines for voluntary disclosure by identifying leading practices to improve consistency, accessibility, clarity and usefulness of climate- related financial reporting. (December, 2016).

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XBRL WEEK IN FRANKFURT 2016

 Climate-related financial risks and opportunities

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 Promotes alignment across existing disclosure

regimes,

 Mandatory regulations affecting banks  Disclosure

frameworks promoted by governments: mandatory and voluntary way

 Disclosure

frameworks, exchange listing requirements and Indices. Voluntary and Mandatory

 Disclosure frameworks, NGOs. Voluntary

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 Mandatory regulations

Source: Phase I Report of the Task Force on Climate-Related Financial Disclosure

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 Disclosure Framework from Government

Source: Phase I Report of the Task Force on Climate-Related Financial Disclosure

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 Disclosure frameworks, NGO

Source: Phase I Report of the Task Force on Climate-Related Financial Disclosure

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 The Financial Stability Board (FSB), at the direction of the G20 countries,

has set up the Task Force on Climate-related Financial Disclosure (TCFD) to draw up recommendations on voluntary disclosure.

 The

TCFD has a clear mandate from governments, companies and investors to improve the disclosure landscape so they can better manage climate-related financial risks.

 However, several challenges have to be addressed to increase the use of

climate-related information for purposes of financial and corporate decision making.

 Collect relevant, timely, reliable, material and complete information is

important

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